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Wealth Design Group

June 2018: Its Summer! How Are Your Finances Doing So Far This Year?


Summer Time Finances



When do you check on your financial well-being? Most people usually do it at the beginning or end of the year, and then of course during tax season. Well, I’d like to propose that we do one right now at the mid-point. It’s easy to get caught up in the craziness of everyday life, so summer is a great time to pause and reflect on what you’ve accomplished so far regards your money.

Whether formalized or not, we all have financial goals and aspirations. Are you in a better financial position now than you were last year? Answer that question for yourself. And if you want to chat about it, give me a call or send me an email.

On another note, check out our new sign – we’re pumped!

To help you do your mid-year review and to keep you on track for the rest of 2018, here are ten money tips for June.

  1. An important thought about your financial plan!  Remember it is your plan, and you are the one who should make the final decision about where to put your hard-earned money. When doing your summer financial review, consider looking through this Financial Management Flipbook. The decisions you make should be based on the strategies that are aligned with your goals. Review all your options before you decide what is best for you.
  1. The rules are changing for Medicare in 2019.  President Trump signed into law in April several changes on Medicare.  There are two significant changes.
  • The rules for Medicare’s Part D drug plans were changed. The much-maligned coverage gap (or donut hole) in these plans has been shrinking for years under the Affordable Care Act, and was supposed to end in 2020, at which time consumers in the gap would pay no more than 25 percent to the costs of their drugs. That end date was moved up a year to 2019.
  • Medicare’s caps on covered expenses for outpatient therapy have been officially repealed. People with persistent therapy needs have bumped against these caps for more than 20 years, and Congress has regularly eased those rules. While claims above current cap levels may be subject to review, people who legitimately need extensive therapy will not have to depend on year-to-year congressional fixes. Source: PBS News Hour - February 14, 2018
  1. Beware of IRS Scams!  The Revenue Service continues to issue warnings about a nationwide phone scam regarding taxes. The callers, who claim to be IRS employees, will often alter the caller ID readout to make it look as if the agency really is calling. Victims are being told they owe taxes and must pay up fast, usually through a wire transfer or a prepaid debit or gift card. They are threatened with arrest, deportation, foreclosure or loss of driver’s licenses.  Seniors and low-income individuals are especially at risk from these scams. IRS doesn’t make unsolicited calls to people to tell them they owe taxes or are due refunds. It contacts taxpayers first by mail. If you get one of these calls, don’t give out any information. Hang up immediately and notify Treasury inspectors at 800-366-4484. In addition, file a complaint with the Federal Trade Commission at the FTC Complaint Assistant on and note “IRS telephone scam.”  Source:  Kiplinger Tax Letter April 6, 2018
  1. Are you enrolled in Medicare?  The law doesn’t allow you to contribute to a health savings account.  However, if you still have balances in your HSA you can continue to take tax-free withdrawals from your account to pay out-of-pocket expenses.  You can also use the money to pay premiums for Medicare Part B and Part D, and for Medicare Advantage plans.
  1. What does the future financial market look like?  Is there a crystal ball?  David Houle, a futurist from Sarasota Florida has this to say about the financial markets; Saudi Arabia has just changed course and is working to increase the price of oil. It is working with OPEC to collectively reduce production. The upcoming summer meeting of the cartel could set an upward direction on oil pricing. There is good historical correlation between relatively rapid oil price increases and recessions or downturns. The new leader of Saudi Arabia, Mohammad Bin Salman, needs to increase prices to fund the transformation of the countries’ society and economy. In addition, higher oil prices will increase the value of the proposed Aramco IPO, expected to be the largest in history. Oil prices have increased prior to most recent recessions.” A correction in the marketplace may lie ahead. This is a good time to plan accordingly, and work-on protecting principal.
  1. June is Annuity Awareness Month. You may have heard a lot of information on fixed annuities, whether through the news, online, or from people you know. Listed are a series questions you should ask your advisor before purchasing a fixed annuity.
  • How safe is the fixed annuity?
  • Are there any hidden charges?
  • Is a fixed annuity an investment?
  • How can I access my money if I need it for an unexpected event?
  • Is the fixed annuity tax efficient?
  • What happens with the money in the account if I should die?  
  1. Are you employed and taking advantage of a Flexible Spending Account provided by your employer?   Don’t overlook the rule on these accounts!  The full amount of the account must be available for the employee at the beginning of the year.  Let’s assume employee Sally elected $200 to be removed from her payroll each month for her flexible account which is $2,400 annually.  Sally works for three months and finds another job.  She is entitled to the entire $2,400.  The employer is on the hook for any of the amount that she did not contribute.
  1. Are you thinking about purchasing Life Insurance?  Whether you choose term or permanent make sure the policy contains an Accelerated Death Benefit Rider Clause.  An accelerated death benefit (ADB) is a benefit that can be attached to a life insurance policy. It  allows  the policyholder to receive cash advances against the death benefit in the case of a diagnosed terminal illness. Many individuals who choose an accelerated death benefit have less than one year to live.  They can use the money for any purpose.  Often there is no charge for this benefit.
  1. Age 70 ½ is a magical age, and many Americans are celebrating it! Many Americans are retired, and it is the age when you are mandated to withdraw monies from your qualified accounts (401K, IRA, etc.).  Many retirees will postpone taking money from these accounts until that age because they don't need the money and don't want to pay the tax.  Is that a good idea?  It depends on your current and future tax bracket. These plans are great for accumulating and postponing taxes, but lousy for distribution.  The key is to start planning years before age 70½ so you have distribution options.   
  1. Paycheck Protection - Don’t leave home without it!  is a new consumer website that educates working adults and employers of the need for disability insurance. The website explains the risk of missing work due to illness, injury, or pregnancy in easy-to-read language and compelling visuals. It clearly describes what disability insurance is, how it works, and how to get it. If this is right for now, don’t delay. Many will not qualify due to health history.  Remember - “You buy it with your health - You pay for it by making monthly premium payments.”




Gary Pevey, CLU ChFC

Wealth Design Group

3445 American River Drive, Suite B Sacramento, CA 95864

(916) 480-0669




Investment advisory Services offered through Wealth Design Group, a Registered Investment Advisor registered with the State of California.

Insurance provided through WDG Insurance Services – CA License #0C17920

The information provided by Wealth Design Group is intended for educational purposes only. This information is not intended as tax, legal, investment, or retirement advice or recommendations. You are always encouraged to seek your own advice from other legal and financial professionals.